Advancing the clean energy partnership between the United States and China

President Hu Jintao concluded his visit to the United States Friday, after meeting with President Obama and other top government and business leaders in Washington, D.C., and Chicago. Among the many issues on the agenda for these two leaders, strengthening cooperation on climate change and clean energy is an area where real progress is being made. As NRDC, Brookings and the Asia Society argued in 2009, both the United States and China are indispensible in the effort to address climate change given their positions as the two largest greenhouse gas emitting countries, their common interests in improving their energy security, the environmental and health costs of their dependence on coal and oil, and the substantial scientific, engineering and manufacturing capabilities that both countries can contribute to developing clean energy.

Significant steps have been taken in establishing meaningful, concrete clean energy cooperation projects since President Obama’s visit to Beijing in November 2009, when a number of important US-China clean energy agreements were signed. In their joint statement, both countries “applauded the progress made in clean energy and energy security since the launch of the U.S.-China Clean Energy Research Center, Renewable Energy Partnership, U.S.-China Joint Statement on Energy Security Cooperation, and Energy Cooperation Program.” And they agreed to work together to support the implementation of the Cancun Agreements and support efforts to achieve a positive outcome at the December 2011 climate change conference in South Africa.

New US-China Clean Energy Agreements and Initiatives

Several announcements on US-China clean energy cooperation during the state visit demonstrated progress on new and continuing programs, including:

The three US-China Clean Energy Research Center (CERC) consortia finalized their work plans on building efficiency, advanced coal and carbon capture and storage (CCS), and clean vehicles. See below for more details.

The announcement of two new Ecopartnerships: “The City of Charlotte, the State of North Carolina, and Duke Energy will form a three-tiered EcoPartnership with the City of Langfang, Hebei Province, and ENN/Xin’ao Group to exchange policy best practices (e.g., renewable portfolio standards), carry out joint demonstration projects (e.g., residential building efficiency demonstrations), and conduct trials for innovative clean energy technologies (e.g., exploring more effective ways to deploy smart meters). . . . Case Western Reserve University will cooperate with the Chinese National Offshore Oil Corporation to research new energy efficiency techniques and new methods of lowering greenhouse gas emissions.” (See Duke Energy’s announcement, Case Western’s news release and the list of existing Ecopartnerships.)

An agreement between the U.S. Department of Transportation, the National Development and Reform Commission, and other Chinese agencies to cooperate on next generation aviation biofuels, congestion and multimodal transportation planning, and livable communities.

A Statement of Intent between US DOE and China’s Ministry of Science and Technology on data sharing for electric vehicle demonstrations projects between the cities of Los Angeles and Shanghai that will accelerate the deployment of electric vehicles.

Announcement of a joint U.S.-China Eco-city Initiative between the US DOE and China’s Ministry of Housing and Urban-Rural Development, under which both sides will develop guidelines and policies to support the integration of energy efficiency and renewable energy into city design and operation.

In addition, both sides are continuing to make progress on other clean energy cooperative initiatives announced during President Obama’s November 2009 visit including exchanges, workshops and a wide array of research collaborations on electric vehicles, energy efficiency, and renewable energy topics. (See the US DOE Progress Report on US-China Clean Energy Cooperation.)

US-China Clean Energy Center Consortia Release their Joint Work Plans

As I noted in a previous post, the American and Chinese participants in the three US-China Clean Energy Research Center (CERC) consortia on building efficiency, advanced coal and carbon capture and storage (CCS), and clean vehicles met in Washington during Hu’s visit to finalize the joint five-year work plans (see them for the building efficiency, advanced coal and CCS, and clean vehicles consortia). Organized on the U.S. side by the Department of Energy, the consortia are public-private partnerships of government laboratories and agencies, universities, industry and non-profit organizations (NRDC is part of the building consortium). The consortia are being led by Lawrence Berkeley National Laboratory (building efficiency), West Virginia University (advanced coal and CCS) and the University of Michigan (clean vehicles) on the US side, and the Ministry of Housing and Urban-Rural Development (building efficiency), Huazhong University of Science and Technology and China Huaneng Group Clean Energy Research Institute (advanced coal and CCS), and Tsinghua University (clean vehicles) on the Chinese side. Each consortium is funded over five years by $25 million in government and consortia member funding on the US side (totaling $75 million), with a similar amount of funding on the Chinese side for a total of $150 million.

As one can see from the joint work plans, the CERC is aimed at furthering development of key technologies that have the potential to reduce energy consumption and greenhouse gas and other pollutant emissions in each sector. And, just as importantly, researching ways that these technologies can be deployed in the marketplace, because even the most efficient and advanced technology will not be effective unless we can develop the policy tools and understanding to increase their market deployment at scale. For example, the building consortium will be researching technology such as building energy monitoring and simulation, building envelope technologies, advanced heating and cooling, and lighting, and also focusing on policies such as building energy efficiency codes and labels to promote building efficiency. The advanced coal and CCS consortia will research several technologies for reducing emissions from coal, including integrated gasification combined cycle (IGCC) power plants and CCS, post-combustion CCS technology, geological sequestration, and using algae to bio-fix CO2 emissions from power plants, and it will be evaluating the cost of bringing these technologies to the market. Finally, the clean vehicles consortia will research electric vehicles (including advanced batteries, advanced EV technologies, and interaction with the grid), advanced biofuels, and advanced lightweight materials, as well as focusing on energy systems analysis and technology roadmaps.

Although we are just at the beginning of this five-year endeavor, I am heartened to see this level of engagement between our two countries, because this is the kind of sustained and focused cooperation that we need to make real progress on developing the key low-carbon technologies of the future. Both countries will benefit from the US-China CERCs, in terms of economic and scientific development, reducing greenhouse gas and other pollutant emissions, and fostering the enterprises and skilled workforce that will push these technologies forward.

US-China Business Cooperation on Clean Energy

In addition to the projects covered above, US companies announced several deals with Chinese partners related to clean energy that will create American jobs and exports. General Electric signed five clean energy, railway and aviation deals worth over $2 billion that will reportedly support 4,500 American jobs. These include a joint venture with Shenhua Group to develop coal gasification technologies in China, an agreement with China Huadian Corporation to develop distributed energy combined heat and power projects, and a letter of intent with China’s Ministry of Railways to reaffirm both parties’ intent to collaborate on High-Speed Rail (HSR) and electric rail opportunities in North America. (See GE’s press release on the deals.)

American Electric Power also signed two cooperative agreements. The first one with China Huaneng, the US DOE, and China’s National Energy Administration would evaluate a post-combustion, advanced amine carbon capture technology developed by China Huaneng and share data about power plant operation efficiencies. The other agreement with State Grid Corporation of China would “jointly evaluate and potentially advance six transmission and distribution technologies, including ultra-high-voltage transmission equipment, advanced energy storage technologies, smart-meter technologies, and distributed generation technologies.” (See AEP’s press release on the deals.)

UPC Management, a wind power developer based in Miami, announced an agreement with China Guodian Corporation to jointly develop seven wind power projects in China with a combined capacity of over 1,075 MW and valued up to $1.5 billion. AES Corporation, based in Arlington, Virginia, also announced an agreement with Chongqing Energy Investment Group to jointly develop, construct and operate a series of renewable energy projects in China, including hydroelectric, wind, ventilation air methane, clean coal and low carbon technology projects.

Smaller U.S. firms are also innovating in this space, with the New York-based startup Ener1 entering into a joint venture with a unit of China’s largest auto-parts maker Wanxiang Group to build up to 40,000 battery packs for electric vehicles and power grid energy storage by 2014.

The announcements this week during President Hu’s visit remind us that China and the United States have much to benefit by cooperating on clean energy and climate, and that both bring enormous talents and resources to these endeavors. While there are bound to be some differences between the countries on climate and energy issues in the future, the US-China Clean Energy Research Center, Ecopartnerships, and the many other public and private clean energy initiatives between our two countries make clear how much we each have to offer the other in the fight to address climate change and to secure a cleaner, more secure and healthier future for our people.

These agreements will lead to tangible deployment of low-carbon technologies in both countries which will benefit not only the US and China, but also the world. After all, widespread deployment of clean energy solutions in the world’s two largest economies will make these solutions more common and more affordable for all, making a crucial contribution to the world’s efforts to address climate change.